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Do you trust your mobile phone?

It’s a good question. So much of the time we hear the saying, “The perception is the reality.” The key fear is that our credit card number can be intercepted or that intruders might access our personal information. The fear is real; the reality is that it is easier to commit fraud by an unscrupulous restaurant staffer who has access to your plastic for a couple of minutes while you settle your bill. Cyber thieves must do a lot more complicated work to do the same thing.

Even though we don’t mind passing our credit card details over the phone to the local pizza franchise or allowing our cards to be swiped after a meal, there still seems to be a major concern from customers with the potential security threats posed by “mobile money.”

We are becoming more dependent on and integrated with our mobile phones. Some reports show that 65 percent of users confess to sleeping with their mobile phone and on average we check them a staggering 150 times a day. With the increasing personalization of mobile phones (extended to new services such as hand-held shopping and other transactions), consumers will be tempted to store their personal account information and PINs in the devices for ease of access. Unless care is taken to password protect a phone, the risk of this financial related information getting into wrong hands could be high.

To allay these security fears the mobile banking providers need to create an environment for safe transactions by addressing concerns around authentication, theft, fraud, hacking, malware, and so on.

Rather than creating new access methods, consumers will probably feel more comfortable if existing systems can be extended into the mobile banking area. The most obvious one to adopt appears to be the user authentication and OTP (one-time-password) that has been in existence for some time and has seen a fair degree of success in preventing fraud. Also, OTP, being dynamic in nature, is less susceptible to fraud.

In order to maintain a good, consistent consumer experience, both telcos and banks should stick to their current methods of registration, authentication (SIM based) and other data checks deemed necessary for checks while registering a user for financial transactions. Handset manufacturers are also doing their bit by enabling NFC chip-based phones for NFC-enabled transactions that provide security of personal data with proper authentication.

The adoption of mobile phones as a safe and secure means to transfer data will depend on the confidence that the interactions between vendors and users are safe and secure. Certain work is being done around defining standards in the mobile payment space and PCI SSC is one such organization that is working to maintain, evolve and promote the standards among various key parties. Similarly the NFC Forum and EMV Co are organizations that are working towards interoperability and mobile payment standards, respectively.

Mobile associations must work in tandem with governmental and securities agencies to ensure that local laws are built around ensuring safety of data theft and data leakage. And consumers need to be educated on such initiatives by the industry body to instill a sense of trust. One thing is certain: our affection for these devices is soaring every minute.